· Updated · Built around the Rent or buy calculator
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"Rent is dead money" and "property always goes up" are the two things every South African hears. The fair test is to give each choice the same cash and the same monthly budget, and see what you own at the end.
The three paths
- Buy: your cash pays the transfer duty, attorneys and deeds office (the bond costs calculator itemises them), the rest is the deposit. You pay the bond (20 years at prime, 10.75%) plus rates, levies and upkeep.
- Rent + bank deposit: you rent a similar place. All your cash, and every month the difference between owning costs and rent, goes into a bank deposit.
- Rent + index fund: the same, but the money goes into a fund that tracks the JSE Top 40, like the Satrix Top 40 (fee 0.10% a year). The compound interest calculator shows the growth on its own.
- Whenever owning becomes cheaper than renting (for example once the bond is paid off), the owner invests the difference in the index fund - so every path spends exactly the same each month.
Move the assumptions
What the numbers say - and what they do not
- The JSE Top 40 has returned 12.38% a year over the last 10 years (Satrix Top 40, annualised to 31 August 2026; 16.23% over 5 years). Past returns are not a forecast - the default slider uses a more cautious 11%.
- A bank deposit is safe but has to beat inflation - consumer inflation was 4.4% in August 2026 (Stats SA) - the inflation calculator shows what that does to your rands. Interest above R23 800 a year (R34 500 from age 65) is also taxed (tax on interest calculator), which this chart leaves out. The default 7.5% deposit rate is an assumption: compare real offers with the fixed deposit calculator.
- House price growth is the number that decides it. The default 4% a year is our assumption, not a sourced statistic - growth differs hugely by suburb and city. Try 2% and 7% and see how far apart the answers are.
- The house is leveraged: the bank funds most of it, so its growth works on the whole price, not just your deposit. That is why buying can win even if houses grow slower than shares - and why it hurts more when they don't.
- Left out on every path: selling costs and agent commission, tax on investment growth, rate changes and the bond insurance and fees banks add. A home you live in also gets the R3 million capital gains exclusion when you sell it; investments outside a tax-free account pay tax along the way.
Check one case in detail
The rent or buy calculator runs the same month-by-month sums for one horizon, with the buying costs itemised:
Sources
- Satrix Top 40 performance (annualised to 31 August 2026: 1 yr 19.33%, 5 yr 16.23%, 10 yr 12.38%) and TER 0.10%: satrix.co.za, read 15 October 2026. Naming a fund is an example, not a recommendation.
- Prime 10.75% = SARB policy rate 7.25% (from 25 September 2026, SARB MPC statement) + 3.5%.
- CPI 4.4% (August 2026): Stats SA consumer price index release, as used across CalcSA. Rent and owner costs in the chart rise with it once a year.
- Transfer duty, conveyancing and deeds office costs: SARS transfer duty table, LSSA 2026 fee guideline and Deeds Office tariff from 1 April 2026 (the CalcSA bond costs sums).
- Interest exemption R23 800 / R34 500 and the R3 million primary residence exclusion: SARS 2026/27.
- Not verified from a primary source: house price growth and the bank deposit rate - both are slider assumptions.
Calculators used in this post
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